October 18

Terra, D.O.P. and the Lanham Act

San Marzano tomatoes are often praised as the best tomatoes in the world. But not every San Marzano tomato is a tomato grown in San Marzano sul Sarno in the Campania region of Italy because the label “San Marzano” refers to both a type of tomato and a location. And some producers are growing San Marzano style tomatoes in the United States, are calling them “pomodoros,” which is, of course, Italian for tomato, and may be giving Italian producers of authentic D.O.P. San Marzano tomatoes agida. Why? Because the American producer is relying on the good reputation of the San Marzano brand to sell its product that is not held to the strict guidelines imposed by Italian law.

Do the tomatoes grown in California taste the same as the ones grown in San Marzano sul Sarno, Italy? An American consumer, who has never tasted authentic, San Marzano tomatoes may never know. The purveyor of true San Marzano tomatoes not only loses out on the initial sale, but may lose future sales either because the consumer is underwhelmed by the inauthentic product or because the consumer is satisfied with it. In either case, the consumer is unlikely to reach for the more expensive, true San Marzano tomatoes the next time he/she is in the market. Thus, it looks like the tomatoes may be ripe for litigation.

Does terra matter under the law? The short answer is, yes, the producer of authentic San Marzano tomatoes might be able to obtain damages under U.S. law. Although there are no D.O.P.( Denominazione d’Origine Protetta), A.O.C. (Appellation d’Origine Contrôlée), or similar origin designation under U.S. law, the courts have made clear that a misrepresentation of product origin or even a label that is misleading about product origin can violate the Lanham Act, which protects against false affiliation and false advertising. And a competitor who can show injury can bring a civil action even if the FDCA takes no issue with the food label. Relief may include injunctive relief, lost profits, disgorgement of profits gained as a result of the false advertising, amounts necessary for corrective advertising, and, in the exceptional case, attorneys’ fees. The Lanham Act permits courts to increase damages to no more than three times the actual damages proved.

At Felicello Law, we are fascinated by food and the law. Contact us at info@felicellolaw.com or on Twitter @rfelicello if you are interested in continuing the discussion.

PLEASE NOTE THAT FELICELLO LAW P.C. DOES NOT REPRESENT ANY PURVEYORS OF TOMATOES.

April 10

AFTER EXTRACTING A POUND OF FLESH, THE DOJ IS SET TO DROP ITS CHALLENGE TO THE ANHEUSER-BUSCH INBEV/ GRUPO MODELO TRANSACTION

Glass of beer isolated on a white background

On Friday, April 5, 2013, Anhueser-Busch Inbev (“ABI”) announced that it had reached an “agreement in principle” with the U.S. Department of Justice in connection with its planned acquisition of the remaining 50% of Grupo Modelo that it does not already own. The announcement did not provide details but said that the “proposed resolution is substantially in line with the revised transaction announced on February 14, 2013.

Under the revised terms announced on February 14, 2013, Grupo Modelo’s U.S. business is transferred to Crown Imports, a fully-owned entity of Constellation Brands, Inc. by providing licenses in perpetuity to the Grupo Modelo brands in the U.S. and a state-of-the-art brewery located in Mexico, close to the U.S. border, for the price of $2.9 billion, subject to a post-closing adjustment.

January 31

IS ANHEUSER-BUSCH’S PLAN TO MERGE WITH GRUPO MODELO ANTICOMPETITIVE?

The Department of Justice thinks so. It filed suit today (Jan. 31, 2013) to prevent consummation of the planned merger, which was announced June 29, 2012.

The D.O.J. argues that Anheuser-Busch’s acquisition of the remaining 50% share of Modelo that it does not currently own would “substantially lessen competition” and would have “anticompetitive effects” in violation of the Clayton Act § 7, 15 U.S.C. § 18.